A Unique Permian Play

John Jannarone, editor-in-chief of IPO-Edge and CorpGov, explains how Target Hospitality Corp. could have a beat on the most scarce commodity in the Permian Basin: beds. The company will be created through a three-way merger between Target Lodging, Signor Lodging and Platinum Eagle Aquisiton Corp. John provides the details and discusses how to take advantage of the opportunity, in this interview with Brian Price. Filmed on February 5, 2019.

Comments

I did this 50 years ago.
John have you ever heard about RVs?
Just in case RVs is short for recreation vehicles.
A worker can buy one and park it close to work for a lot less than 300.00 a night. When he looses his job he can move it to the next job. If oil prices drop or the ability to move it to the coast is impacted the need for labor to drill or compleat wells will disappear. These short term workers are needed
Till the day the oil companies aren’t drilling.
Been there done that!

These are the types of ideas that I was hoping would begin to surface on RVTV (below the radar, with some complexity), so thanks for that. And, I like John's presentation. That said, SPACs can be very volatile post closing, and a good rule of thumb is to wait to invest until at least after the first earnings call. SPACs also tend to be overlevered at close (no idea if this one is), which can exacerbate the volatility.

Suggest you have a serious chat to someone like Todd Walker at Source Strategies in San Antonio before you pile into this trade. I have never met Todd but appreciate his contributions to local media. I do know there is a man camp with 100% vacancy near my father-in-law's hunting lease close to the Permian Alpine High discovery . . . And Signor Lodging is certainly not trumpeting their camps in the Cline Shale, Kenedy or Carrizo Springs. The best analogy to investing in man camps when activity moves or drops is that it's like owning a drive-in movie theatre with no movies to show. How about a look at these "contracts" with the oil majors? This is the only sector of the oilfield that is more volatile than the oil price itself! The rest of the equipment moves around leading or lagging the drilling and production. But the man camps . . .? It's unique alright!

Thanks for the information. What he’s talking about sounds a tad different. It appears to me that this is higher end accommodations for the executives in the right location hence the long term contracts with the majors. Definitely worth looking at imho.